2025-VIL-1110-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Interest on delayed refund of unutilised CENVAT Credit, Subjudice matter - The appellant filed a refund claim for unutilized CENVAT credit on 06.09.2017, which, after initial rejections, was allowed by the Tribunal. Subsequently, the refund amount was sanctioned and disbursed without any interest - An appeal for the grant of interest was rejected on the sole ground that the main matter is subjudice, as the Department had filed an appeal before the High Court against the refund sanction - Whether an assessee is entitled to statutory interest under Section 11BB of the Central Excise Act, 1944, on a refund sanctioned and paid significantly beyond the statutory three-month period, particularly when the interest claim was initially denied due to pending litigation that was later withdrawn - HELD - The appellant is entitled to interest on the delayed refund as the primary reason for its denial by the lower appellate authority, which was the pendency of the Department's appeal in the High Court, no longer exists following the appeal's withdrawal - The right to interest on delayed refunds is a statutory mandate under Section 11BB of the Central Excise Act, which provides for payment of interest if a refund is not sanctioned within three months from the date of the application - In the present case, the refund application was filed on 06.09.2017, and the sanction order was passed on 23.02.2021, a delay far exceeding the statutory three-month period. This delay itself establishes the appellant's entitlement to interest. The rate of such interest is fixed at 6% per annum as per Notification No. 67/2003 dated 12.09.2003, and it is payable for the period commencing from the date immediately after the expiry of three months from the date of the refund application until the date of its final disbursement - The appeal is allowed
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